Washington Bulletin 6/26

June 28, 2017

Washington Update

On Capitol Hill

Budget Negotiations Continue Through the Week

House Republicans failed to reach agreement by Friday, June 23rd on a budget resolution or on how to package the 12 annual appropriations bills needed to keep the government open in the fall. Republicans say discord over the top-line level for defense spending next year, as well as resistance by the House Agriculture Committee over cuts to the food-stamp program, have put plans for a House Budget Committee markup next Wednesday on hold for now.

The conference has agreed to back $511 billion as the top-line for non-defense spending, lower than the $515 billion budget cap for fiscal 2018 and a cut from $518.5 billion in the current fiscal year.

House Appropriations Labor, Health and Human Services, Education, and Related Agencies (Labor-HHS-Education) Subcommittee Chairman Tom Cole (R-OK), who also sits on the House Budget Committee, said the main problem was resistance from the House Armed Services Committee to the $621.5 billion top-line the Budget Committee wants to set.

House Armed Services Chairman Mac Thornberry (R-TX) originally intended to use $640 billion as the top-line for regular defense spending, bumping that up to $705 billion when uncapped war funds are included. Instead, the House Armed Services bill is scheduled, as of Friday, June 23, to fund regular defense programs under the panel’s jurisdiction at $621 billion and add about $10 billion to almost $75 billion in war funds not subject to spending caps in law. With a defense top-line agreed upon, budget negotiations are expected to conclude the week of June 26.

Reconciliation instructions to put reductions to entitlement programs such as welfare and food stamps on a fast track remain a sticking point. Freedom Caucus Chairman Mark Meadows (R-NC) said today he is still pushing for more than the $150 billion in cuts included in the draft budget resolution.

And, House Appropriations Transportation and Housing and Urban Development Subcommittee Chairman Mario Diaz-Balart (R-FL) said the conference didn’t decide on whether to package appropriations bills as a giant July omnibus or to run a series of minibuses. He said that agreement on the top-line must come first.

While House Republicans agreed to cut non-defense agencies to $511 billion next year, many say Democrats will still have an opportunity to boost that level before the fiscal 2018 spending cycle is completed. Republicans want to raise defense spending above the $549 billion cap that is set in law and they will need at least eight members of the Senate Democratic caucus to do that under that chamber’s rules.

Senate Republicans Releases Health Care Reform Bill

Senate leaders released a draft proposal to overhaul Obamacare and Medicaid, which would be considered as a substitute amendment to H.R. 1628, which the House passed by a vote of 217-213 on May 4.

The bill largely resembles the House bill passed last month, including the tax cuts for wealthy people, drug makers and insurance companies. The Senate bill’s initial Medicaid cuts are more gradual than the House, though both end the open-ended funding of the health care system for the poor.

The plan, a product of months of closed-door meetings, includes $15 billion a year in market-stabilizing funds over the next two years and $10 billion a year in 2020 and 2021. These payments would come in addition to cost-sharing subsidy payments, which would be extended through 2019.

Senate Majority Leader Mitch McConnell (R-KY) has previously said he wants the full chamber to vote on the measure next week. Second-ranking Senate Republican John Cornyn (R-TX) said leaders want votes on multiple amendments starting June 29, with final passage of the bill early the next morning. But holding a vote next week would be potentially risky for Republican leaders, as some have already come out against the bill, limiting the number of Senate votes needed for passage.

The draft bill does not, as of yet, include a provision to penalize people who don’t maintain coverage continuously, senior GOP Senate staff said. Drafters are meeting with the CBO and Senate parliamentarian to determine whether they can include such a provision, staff said. The House bill allows insurers to charge people more for coverage if they are uninsured for 63 days in a year before signing up.

The legislation is expected to result in millions of people losing insurance when evaluated by the CBO — an estimate the nonpartisan office said it aims to release early next week. The CBO said the House-passed bill would result in 23 million fewer people with insurance by 2026.

Outside of the Hill, Health insurers criticized the steep cuts to Medicaid proposed in the Senate bill to repeal and replace the Affordable Care Act as “too much, too fast.” While, doctors and hospitals have largely panned the Senate bill, with the American Hospital Association telling senators to “go back to the drawing board and develop legislation that continues to provide coverage to all Americans who currently have it.” The American College of Physicians in its own letter said it “urges the strongest possible opposition to the bill and asks all Senators to vote against this harmful legislation.”

Republicans plan to use a mechanism allowing the bill to pass the Senate with only 50 votes, plus the support of Vice President Mike Pence. A Senate-passed bill would go to the House, which could either approve the Senate version and send it to Trump’s desk or negotiate a compromise version, which would then have to pass both chambers.

Sanctuary Cities & Detention Bill Introduced in the House

House Judiciary Committee Chairman Bob Goodlatte (R-VA) introduced H.R. 3003 Thursday, June 22, which would expand the Homeland Security Department’s (DHS) authority to detain immigrants during a removal proceeding. Under the bill, state and local governments would be made ineligible for certain federal funds if they have “sanctuary” policies in effect that hinder cooperation with federal immigration officials. Withheld funds would be reallocated to states and localities that don’t have the barred policies.

Additionally, a federal, state, or local government couldn’t prohibit its personnel from complying with federal immigration laws or assisting federal enforcement activities. A jurisdiction that doesn’t comply with the requirements would be ineligible to receive funds under:

The Justice Department’sState Criminal Alien Assistance Program, which reimburses state and local governments for incarcerating undocumented immigrants.

The Justice Department’sOffice of Community Oriented Policing Services, also known as the COPS Office, which provides grants to hire officers and support community policing.

Any other grant program administered by the departments related to law enforcement, terrorism, national security, immigration, or naturalization.

The bill would further authorize DHS to issue a detainer for an immigrant arrested for any violation of a criminal or motor vehicle law, if the department has probable cause to believe the immigrant is inadmissible or deportable. Under current law, if an immigrant is arrested for a controlled substances violation and a law enforcement official believes the individual is in the U.S. illegally, the Justice Department can issue a detainer and take custody of the individual.

The bill would waive civil liability against states, localities, nongovernmental entities contracted to provide detention services, and relevant personnel for actions they take to comply with a detainer. The federal government would substitute itself as the defendant in any such cases. And, decisions to arrest and detain an immigrant during a removal proceeding would be transferred to DHS from the Justice Department.

The House Judiciary Committee hasn’t acted on the bill, called the “No Sanctuary for Criminals Act,” which Chairman Goodlatte introduced on June 22. The House hasn’t voted on a broader immigration enforcement bill, H.R. 2431, that includes substantially similar provisions. And, the Senate didn’t reach the 60-vote threshold required to invoke cloture on previous measures, such as S. 2146 in the 114th Congress or S. 3100 in the 114th Congress, that contained substantially similar provisions.

House, Senate FAA Bills Call for New Passenger Rights

Both the Senate and House committees responsible for the Federal Aviation Administration (FAA) officially introduced bills June 22 with bi-partisan co-sponsors. The House bill, named: “The 21st Century Aviation Innovation, Reform, and Reauthorization Act”, would reauthorize federal aviation programs for six years. While the Senate bill, named: “S. 1405, the Federal Aviation Administration (FAA) Reauthorization Act of 2017” would reauthorize the programs for four years.

They key difference between the two bills, however, is a provision in the House bill that would remove the air traffic control function from the FAA and put it under private board control.

“Our legislation focuses on enhancing safety, improving air travel for the traveling public, and reforms to help bring the future of aviation closer to reality,” Senate Committee on Commerce, Science, and Transportation Chairman John Thune (R-SD) said in a statement. “To address eroding rural access to our air transportation system and delays created by congestion around our most populated corridors, our proposal seeks out new solutions benefiting all Americans who use or depend on air transportation.”

Both the House and Senate bills potentially grant public airline customers greater protections from being bumped from a flight after boarding and could receive higher compensation if involuntarily bumped under the provisions of the FAA reauthorization bills.

Current authorization for the FAA expires on September 30th.

Senate Banking Leaders Discussing Bipartisan Flood Reauthorization

The House Financial Services Committee voted Wednesday, June 21 to advance a seven-bill package to the floor to reauthorize and overhaul the National Flood Insurance Program (NFIP). Two other Senate reauthorization proposals have already been released, including one measure (S. 1368) sponsored mostly by Senate Banking Committee members.

And, as of Thursday, June 22nd, leaders on the Senate Banking Committee are negotiating their own bill to reauthorize the NFIP. But Committee Chairman Mike Crapo (R-ID) and Ranking Member Sherrod Brown (D-OH) are discussing their own bipartisan bill for NFIP reauthorization. The Senate Banking Committee has jurisdiction over property casualty insurance matters, which flood insurance falls under.

House Democrats opposed some of the seven NFIP bills approved by House Financial Services. The measures could pass without Democratic support in the House, but Senate rules would require at least some Democrat support before the NFIP expires Sept. 30.

Currently, the NFIP is $25 billion in debt to the U.S. Treasury. The program’s overseer, Roy Wright, has told lawmakers he sees no way to ever repay the money under the program’s current structure and with the increased expected losses from future disasters.

The solvency issue is compounded by the threat of rising sea levels and increased severe storm activity expected because of climate change.

Administration

Trump Meets with Tech Executives on Drones, Internet of Things

President Trump met with two dozen executives from technology companies and venture capital firms on Thursday, June 22 for advice on how the government can promote emerging technologies such as drones and the internet of things.

“We want to remain No. 1,” the President told the technology company leaders. “We’re on the verge of new technological revolutions that could improve virtually every aspect of our lives, creating vast new wealth for American companies and families.”

In a public session open to reporters and television cameras, the president and corporate leaders offered fulsome praise for each other. Trump told Stephenson AT&T is doing “really a top job.” Precision Hawk CEO Michael Chasen congratulated the President “on the great job you’ve been doing.”

The tech leaders were to hold breakout sessions on drones, connected devices and easing access to venture capital for startups outside traditional enclaves such as Silicon Valley, on Wednesday, June 21.

Trump Says Immigrants Should Wait Five Years to Get Welfare

President Trump announced on Wednesday, June 21, that he’ll propose legislation which would ban U.S. immigrants from receiving any welfare benefits for five years.

“I believe the time has come for new immigration rules which say that those seeking admission into our country must be able to support themselves financially and should not use welfare for a period of at least five years,” the President said at a campaign rally in Cedar Rapids, Iowa. “And we’ll be putting in legislation to that effect very shortly.”

Trump campaigned on promises of a crackdown on undocumented immigrants in the U.S. and signed an executive order shortly after taking office in January 2017 that has led to increases in deportations across the country, according to immigrant advocates. However, he has also targeted refugees and other legal immigrants, proposing to reduce the number who enter the country and establish new standards that would weed out people without high skills or much education.

“We want to get our people off of welfare and back to work,” Trump said. “We also want to preserve our safety net for struggling Americans who truly need help. We want to help them. But others don’t treat us fairly.”

He did not detail his proposal to ban immigrants from receiving immigration benefits, which he has not previously disclosed. The legislation would presumably go further than the 1996 welfare overhaul passed under former President Bill Clinton, which banned many kinds of legal immigrants from receiving most federal welfare benefits for five years or longer after entry into the U.S., including health programs, cash assistance and subsidies for home energy costs. That law exempted certain immigrants, including refugees, people from Cuba and Haiti, and green-card holders, according to the National Immigration Law Center, an advocacy group.

In an executive order announced late Wednesday, Trump lifted an Obama-era requirement that the U.S. make sure at least 80 percent of those who apply for nonimmigrant visas for entry to the U.S. are interviewed within 3 weeks of their application. The Obama rule made exceptions in the case of security considerations.

Ivanka Trump Visits Capitol to Talk Family Tax Policies

The senior adviser and daughter of President Donald Trump, Ivanka Trump, attended a meeting at the White House led by Republican Senator Marco Rubio (R-FL) that included talks about expanding the child tax credit, paid family leave and other family-focused tax policies.

Senator Rubio said the gathering was spurred by a talk he had with Trump over a month ago, calling it a “first step” for Republicans to discuss tax policies for working families.

Participants included eight Republican lawmakers but did not include any Democrats, who traditionally are more sympathetic to the family policies Ivanka Trump has been working on.

Ivanka Trump has stressed that paid parental leave and support for child care costs are priorities of the administration, but she has signaled flexibility on the approach. Advancing parental leave in the Republican-controlled Congress is considered highly unlikely, but winning some family-oriented tax changes are possible.

Senators Rubio and Mike Lee (R-UT) have proposed enhancing the child tax credit, which currently provides a tax credit of up to $1,000 for qualifying families. Senator Deb Fischer (R-NE) has proposed a tax credit for businesses that offer paid family leave.

Trump has indicated she was open to revising the paid parental leave proposal laid out in the White House budget, which would require states to finance the benefit for new mothers, fathers and adoptive parents through unemployment insurance programs. Response to that proposal has been mixed. Democrats, who traditionally support paid leave, say they would prefer a more robust benefit that also covers people caring for sick relatives. And both Democrats and Republicans raised questions about the cost burden for states.

Democratic women in the House of Representatives announced a Wednesday hearing on family leave, calling the White House proposal “inadequate” in a news release.

The White House plans to privately negotiate a massive overhaul of the tax system with Republican leaders in Congress, possibly giving rank-and-file members little if any say over the finished product.

Gary Cohn, President Trump’s top economic aide, announced Tuesday, June 20, that the administration doesn’t want to engage in prolonged negotiations after the package is made public this fall. Cohn said the goal is to release the overhaul in the first two weeks of September.

“We don’t want to be negotiating the tax bill on the floor,” Cohn said at a meeting of technology executives.

Earlier this year, House members balked when Trump officials demanded that they vote on a bill to repeal and replace former President Barack Obama’s health law. The House narrowly passed the bill only after lengthy negotiations among lawmakers. Such an approach also would come as Senate Republicans have been widely criticized for crafting a health care bill behind closed doors, with even some in the Republican Party complaining about the secretive process.

In April, the administration unveiled a one-page proposal that called for massive tax cuts for businesses and a bigger standard tax deduction for middle-income families, lower investment taxes for the wealthy and an end to the federal estate tax for the superrich — like the president and his family.

The plan also calls for eliminating the federal deduction for state and local taxes, a proposal opposed by Democrats and some Republicans in states like New York, New Jersey and California.

House Speaker Ryan (R-WI) said that while it won’t be easy, he is confident Congress can pass a tax package by the end of the year, despite political divisions among Republicans and a crowded legislative agenda for Congress.